After Foreclosure, a Focus on Title Insurance

When home buyers and people refinancing their mortgages first see the itemized estimate for all the closing costs and fees, the largest number is often for title insurance.

Title insurance covers you in case people turn up months or years after you buy your home saying that they, in fact, are the rightful owners of the house or the land, or at least had a stake in the transaction.

The insurance companies or their agents begin any transaction by running a title search, sifting through government filings related to the property. They do this before you buy a home or refinance your mortgage to help sort out any problems ahead of time and to reduce the risk of your filing a claim later.

But sometimes they miss things, and new issues can arise later.

When Troubled Assets Are the Attraction

Troubled assets and mutual funds are terms that aren’t often yoked together, at least not in marketing campaigns. Yet three new closed-end mutual funds have made investing in such assets a selling point.

The funds — two from Nuveen Investments and one from Legg Mason — are the primary retail participants in a federal government program started last year to bolster the market for distressed mortgage -backed securities. As far as that broad goal goes, the effort has been relatively successful. The commercial mortgage-backed securities component of the Barclays Capital U.S. Aggregate Bond Index, a gauge of the market, rose 19.3 percent this year through Sept. 30.

Unemployement 12.9%

Unemployment is up to 12.9%, contradicting what is circulating to be 9.6%, accroding to Parker Spitzer. Overall unemployment is high ,which is quite depressing for unskilled workers, especially for those with less than a college degree.

5.9 millions workers were discouraged, and if these workers were actively searching for jobs, the figure would shoot higher.

Government borrowing and spending are suggested at this moment since businesses don't want to invest, and consumers don't want to consume. Even though it is encouraged that this is the time to spend, it is most likely that consumers might not have the stimulation to do so since many are in deep debts.

2010 deficit near $1.3 trillion

Well, if the morbid jobs report and the weak dollar were not bad enough, the Congressional Budget Office added their estimate of the budget deficit as of September. A whopping 1.3 trillion certainly does not alleviate the headaches in the minds of Americans. Overall, the money spent by the government actually declined. Yet, as evidenced by the jobs report, a substantial amount of people are still out of work. Thus, transfer payments for the unemployed rose a large 34%. We certainly need to reduce unemployment benefits and welfare payments. In fact, all transfer payments need to be examined closely for sheer excessiveness. Although this will never happen..

Dollar crunched again

Unemployment was constant, the dollar fell to its lowest point since January, GAP changes it's logo today was not a remarkable day for the economy except for the breaking of the 11, 0000 point barrier by the Dow Jones. "The U.S. currency fell to 81.8 yen, its lowest since April 1995, and was trading at $1.39 against the euro. The dollar index tumbled to 77.2, matching a low last seen in January." One economist noted that these recent statistics are looking more and more indicative of a double-dip recession. The Fed is looking to buy Treasury bonds to alleviate the situation and lower interest rates, if only partially. These coupled with the possibility of inflation is a potent mix for expected thoughts and behaviors by consumers.

Bank of America halts foreclosures in 50 states

Bank of America is the first bank to stop tens of thousands of foreclosed homes in all 50 states. This decision was made in reaction to pressure from public officials inquiring about the accuracy of foreclosure documents. A company spokesman insists that past foreclosures are accurate. Banking and housing analysts, however, "fear the foreclosure document problems could prolong the housing bust, and hundreds of thousands of inevitable foreclosures will be pushed off into some legal limbo for years."

"If you are looking at the key in this country to economic stability, it's the housing industry," said banking analyst Nancy Bush of NAB Research. "This is a huge mess that helps nothing."

According to a document obtained by the Associate Press, a banking official admitted to signing thousands of foreclosure statements a month without reading many of them.

Senate Majority Leader Harry Reid, D-Nev encouraged banks in Nevada to suspend foreclosures until they are sure homes are not wrongly assigned to foreclosure status.

PNC also announced that it is halting foreclosures and evictions in 23 states so it can review all documents to ensure they were properly completed. PNC is the fourth bank to halt some foreclosures due to evidence that lawyers and employees signed documents without verifying them.

I am shocked by this announcement. Our economy is already in so much trouble and this situation can only prolong the housing crisis we are facing. The irresponsibility of banks got us into the mess and the continued irresponsibility will keep us here.

Unemployment stays at 9.6% as schools, governments slash jobs

While 95,000 jobs were lost last month, the unemployment rate has remained steady at 9.6 percent, according to today's report. Movements in the labor market include an increase in private jobs and a decrease in government jobs, mostly in public schools. The increase in private jobs comes mostly from temporary employment and employment at food and drink establishments.

This poor report increases the likelihood that the Fed will purchase more treasuring bonds to stimulate the economy. This encouraged investors and pushed the Dow Jones industrial average above 11,000 on Friday for the first time since May.

Another bleak report has some worried that our recovery is in jeopardy. It is especially alarming to see how badly the education sector was hit last month. "It's huge. We're cutting one of the key things related to future productivity growth," said Heidi Shierholz, an economist at the Economic Policy Institute.

The author argues that unemployment continues to rise because of weak sales and the uncertainty about future taxes and policies. Businesses are just too worried to invest. While the Fed continues to attempt its fixes, the government also needs to work on gaining the public's support. Nothing will get fixed if people don't have faith in the economy.

Ready For Some Inflation?

The Fed, after seeing the somewhat anemic growth rate in the summer, is mulling the idea of starting inflation to combat the threat of deflation.

"The rationale is that getting inflation up even temporarily would push "real" interest rates—nominal rates minus inflation—down, encouraging consumers and businesses to save less and to spend or invest more."

"Others warn that pushing inflation higher than the target could create public confusion and risk fueling financial bubbles and market instability. They say Fed policy already is weakening the dollar and as a result prompting a gold and commodity boom. "The Fed is treading upon a mine-laden path that has never been tip-toed through in this country," said Andrew Busch, a currency strategist at BMO Capital Markets

So is it time to start spending to beat the expected interest rate?

2nd UPDATE: Australia Employment Soars, Pushes Currency To 2-Year Highs

Unlike many other developed and developing nations that are suffering majorly from this current recession, Australia seems to be doing just fine. Reports state that the country's employment levels are on the rise and have been for the past 12 months!
In September itself they added around 50,000 jobs which sent the Australian dollar to 2 year highs, putting pressure on the central bank to tighten its policies.
"The sterling jobs numbers, released Thursday, underscore Australia's position as one of the world's strongest developed economies, with a pressing need to contain demand at a time when many of its peers are toying with extending emergency stimulus measures to kick-start growth".
This is a very positive sign for job seekers as more people are now finding jobs and getting them too!
Furthermore, "Currency strategists say the Australian dollar is now en route to parity with the U.S. dollar for the first time since it floated in 1983, with little resistance expected around its post-float high at US$0.9850".
Why do you think Australia is doing much better than the rest of the world? Should we follow their model?

Fed's $2 trillion May Not Go Far

The Fed plans to purchase a second round of U.S Treasuries next year in yet another attempt to stimulate the economy. The purchase will range from $500 billion to $2 trillion based upon what The Fed decides in the coming months. However, many top economists are contending that the amount the The Fed decides to purchase will have little difference between $500 billion --> $2 trillion and that furthermore, the purchase itself will do little if anything to begin with in the first place. Referring to the proposed purchase by The Fed, chief U.S. economist at IHS Global Insight, Nigel Gault said, “This is not a game changer for the economic outlook”.
Gault's models show that $500 billion of purchases would boost growth 0.1 percentage point in 2011 and leave the unemployment rate at 9 percent or above for the next two years. This leaves this student questioning; If it isn't going to do anything, then why do it in the first place?